Income Beginner: Introduction to Deposit Accounts

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1.
Asset management accounts make tax preparation easy.
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True. Combined statements listing all your financial transactions make it easy to find the information you need to prepare your return.
2.
The simplest kind of deposit account to set up and maintain is a _______.
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Passbook account. A passbook account is easy to start, offers immediate access to funds, and requires low minimum balances.
3.
All of the following are advantages of deposit accounts except _______.
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High rates of return. High rates of return are not an advantage of deposit accounts, which typically pay lower returns than other investment opportunities.
4.
Which of the following is a reason an investor might open a deposit account?
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All of the above. Investors open deposit accounts for all of these reasons.
5.
Deposit accounts can be appropriate for investors with low risk tolerance.
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True. The high degree of security they provide make deposit accounts an effective alternative for those who can't afford to lose their capital.